WASHINGTON (Reuters) - The U.S. Supreme
Court has opened up a new front in the battle over corporate rights by
ruling that family-owned and other closely held corporations can mount
religious objections to government action.

Monday's decision came in a case in which companies sought an
exemption to a provision of the 2010 Obamacare healthcare law that
requires employers to provide insurance coverage that includes birth
control.

The court allowed the exemption and in so doing raises the
possibility of religious-based exceptions on issues such as blood
transfusions, antidepressants, and vaccinations, liberal Justice
Ruth Bader Ginsburg warned in her dissenting opinion.

She added that there was nothing in the majority opinion, written by
conservative Justice Samuel Alito, that foreclosed the possibility
of a publicly traded company making a similar claim.

The majority's logic "extends to corporations of any size, public or
private," she said.

Alito said there would be various obstacles to such a company making
a claim. He questioned whether a broad array of shareholders would
ever agree to run a company under the same religious beliefs. He
said it "seems unlikely" that big public companies would ever want
to make a religious claim.

The high court ruled 5-4 in lawsuits brought by two family owned
companies, Hobby Lobby Stores Ltd and Conestoga Wood Specialties
Corp. It concluded for the first time that such closely held
corporations could make religious-based objections under a 1993 law
called the Religious Freedom Restoration Act (RFRA).

Some lawyers critical of the decision said it paved the way for
business owners to discriminate against certain employees, including
gays and lesbians. Others said corporations could seek exemptions
from environmental regulations.

The court's majority and lawyers representing the companies involved
in Monday's case insisted the ruling is narrow.

Who ends up being correct about the scope of the ruling will become
clearer when lower courts test the limits of the decision in future
cases.

CORPORATIONS AS PEOPLE

Four years ago, again on a 5-4 vote, the court endorsed corporate
rights in another context: campaign finance. The ruling in Citizens
United v. Federal Election Commission cleared the way for increased
corporate and union spending during federal elections.

It drew sharp criticism from the left, including from President
Barack Obama who, with Supreme Court justices in attendance at his
2010 State of the Union address, accused them of opening the
floodgates for special interests to spend without limit on U.S.
elections.At the time Alito, most notably among the justices present
at the speech, shook his head and mouthed the words, "Not true."

Emphasizing a partisan split on how the law should treat
corporations, Mitt Romney, Obama's Republican opponent in the 2012
presidential election, memorably told a protester on the campaign
trail that "corporations are people, my friend."

The idea that corporations have some of the same rights as people is
not new in U.S. jurisprudence, but Monday's ruling and the Citizens
United case have both expanded on it in new areas of the law.
Seizing upon the rhetorical links between the cases, Ginsburg on
Monday cited then-Justice John Paul Stevens' lengthy dissenting
opinion in Citizens United, in which he said corporations "have no
consciences, no beliefs, no feelings, no thoughts, no desires."

When judged alongside Citizens United, Monday's ruling provided
further ammunition to liberal activists who claim the Supreme Court
majority is too pro-business at the expense of workers.

"The
court's conservative majority will bend over backwards to find that
corporations can make every claim that individuals can bring," said
Doug Kendall, executive director of the Constitutional
Accountability Center, a liberal group critical of what it describes
as the court's pro-business bias.

Others disagreed that Monday's ruling was such a major development.
The court's conclusion that the word "person" in the religious
freedom law applies to closely held corporations was a reasonable
one, said Ilya Shapiro, a legal scholar at the libertarian Cato
Institute. "This was a technical, statutory ruling," he said.

When analyzing religious objection, courts are required under the
religious freedom law to determine whether the government regulation
unduly burdens the company's owners, and, if so, whether it furthers
a compelling government interest and whether the regulation is the
least restrictive way of achieving that goal.

Alito said the ruling dealt specifically with the birth control
provision, noting that in other cases, like immunization, the
government was likely to be able to show that it had a compelling
interest and that there was no less restrictive means for it to
achieve its goal.

In Monday's ruling, the court indicated that regulations that
already allow for exemptions, as the birth control mandate does for
religious institutions, might be especially vulnerable.

Alito addressed Ginsburg's concerns about potential future cases in
his majority opinion. He said it did not give corporations carte
blanche to object to an array of government action, including bans
on employment discrimination.

Ginsburg was not persuaded. The court's "expansive notion of
corporate personhood ... invites for-profit entities to seek
religion-based exemptions from regulations they deem offensive to
their faith," she wrote.